BOSTON Oct 4 (Reuters) - U.S. hedge funds are bracing for
their worst year since the 2008 financial crisis after a
dramatic sell-off in healthcare and biotechnology stocks
triggered double-digit losses for some prominent players last
month.

September's sucker punch in the biotech sector, on top of a
grim August when global markets tumbled due to fears about
slowing growth in China, have pushed many hedge fund managers
deep into the red.

"These are some of the worst numbers we have seen since the
crisis," said Sam Abbas, whose Symmetric IO tracks hedge fund
managers' returns.

The average hedge fund lost 19 percent in 2008 when the
credit crunch hit. Since then, hedge funds have had only one
down year, when they lost 5.25 percent in 2011, data from Hedge
Fund Research show.

While the biotech sector held up relatively well during the
initial market sell-off in August, it cratered in September.

"It was the last remaining bastion of alpha and a sector
where many hedge funds were hiding. Now it has succumbed," said
Peter Rup, chief executive and chief investment officer at
Artemis Wealth Advisors Llc, which invests in hedge funds.

Rup said he was expecting some big negative surprises as
more hedge funds send September returns to clients.
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